Entrepreneurs are often admired for tossing aside conventional management theories and forging a unique path towards success. So what’s an entrepreneur to do when the organizational growth resulting from that success brings pressure to adopt some formal management disciplines?
Any problem that results from growth is a nice problem to have, but entrepreneurs do need to figure out how to find a balance between the innovation that made them successful and the formal organizational discipline that can make success sustainable.
The Advantage Of Rebellion
Entrepreneurs often are rebels. Many success stories start with someone dropping out of business school to start a venture, or with a young executive turning away from a large organization because the corporate fast track wasn’t fast enough.
In fact, the career arc from rebellion to success has become something of a classic American business journey. While foregoing Wall Street for a risky start-up venture is now almost cliché, that was not the case when TIGER 21 Member, Carter Reum, left his career in investment banking at Goldman Sachs to launch a liquor company. Alongside his brother, Carter saw an opportunity in the market to create "a better way to drink" focused on better ingredients and a strong brand, leading the duo to create VEEV, an award-winning artisanal spirits company with a focus on sustainable practices. One can also think of Travis Kalanick who dropped out of UCLA to start his first business. He went on to found Uber, which in addition to making Kalanick a billionaire has helped redefine how Americans think about getting transportation, in particular, and obtaining services, in general.
Of course, the modern tech industry is well versed in this type of career arc, with both Bill Gates and Steve Jobs founding their respective companies shortly after dropping out of college. They not only became two of the world’s wealthiest people, but they also could fairly claim to have changed the world.
Though this type of story does have a distinctly Silicon Valley feel to it, the pattern is much older than that. For example, Thomas Edison didn’t even attend high school, let alone college or graduate school. He not only became one of history’s greatest inventors, but also earned a reputation as a shrewd businessman. In fact, he may have pioneered the practice of harvesting massive amounts of patents for strategic purposes, something that has become de rigueur for today’s technology giants.
One lesson suggested by the stories of the trailblazers above and those of many other entrepreneurs is that they succeeded because they are rebels, not despite it. Meanwhile, a certain orthodoxy has grown up around formal management theory as the number of adherents to that kind of theory has proliferated. According to the National Center for Education Statistics, the number of master’s degrees in business being conferred annually these days is more than seven times what it was in the early 1970s.
Not that there is anything wrong with a formal business education. The point is that there was a time when having an MBA was uncommon enough to give a person an advantage. Now that these degrees have become more widespread, the competitive advantage they represent has been diminished. Many entrepreneurs have found that their competitive advantage comes from finding a different way to approach their businesses—that there is an edge to being a rebel.
Face it—if entrepreneurs didn’t rebel, how could a start-up ever compete? When it comes to following an orthodox approach to business, the advantages of scale and name recognition are squarely in favor of the established players. It takes disruption rather than orthodoxy to break into an established market or create a new one. The innovation doesn’t necessarily have to be in the product itself—often it can be in the things like promotion or distribution.